Convey Inc.'s $255 million acquisition by Project44 last week grew out of a years-long relationship between the two supply chain visibility companies.
"I've known the CEO at Project44, Jett McCandless, for five years," Convey CEO and co-founder Rob Taylor said in a post-acquisition interview. "And we've talked on and off about our visions for the supply chain industry and visibility. So we re-engaged, and it just became evident so quickly that this was such a great fit."
That five year span included Convey raising its series A and B venture rounds, not to mention a lot of hiring and the abrupt changes to market behavior caused by the Covid-19 pandemic. Meanwhile, Project44, based in Chicago, raised its series A through E rounds, bringing its total backing to $397.5 million, most of which came in a $202 million investment in June. That last round valued Project44 at $1.2 billion, the company said.
Convey, which has built software that allows companies to monitor how and when their products are shipped to consumers, kept growing its revenue, aided by a dramatic shift to home delivery since the onset of the pandemic. It reported five quarters of accelerating revenue growth in a row and a 140% net revenue retention rate.
"Timing is everything," Taylor said. "And while we have been talking over the last five years about doing something truly transformational, the timing was never really right and so we each kind of went and did our own thing."
For Convey, that involved exploring funding options, of which Taylor said the startup had many opportunities. Ultimately, the acquisition provided the best opportunity for shareholders and the company's future.
While getting in sync in business and funding cycles was key, the two companies have been simpatico for a while.
Project44 has a focus on what the industry calls first- and middle-mile modes of transportation — the air, sea and rail portions of a product's journey. Convey, meanwhile, specializes in last-mile delivery experiences, which typically start at a regional warehouse and end at a consumer's doorstep or a little after that if you include post-delivery notifications and engagements.
"This really is the first of its kind — sort of a total supply chain visibility solution, and it's global," Taylor said, noting he envisions the predictive supply chain Convey and Project44 are developing to evolve into a fully automated supply chain over the next decade.
"If you know where everything is at any moment in time, think about the decisions you can make in an automated way around arrivals, sourcing, tendering and all of these things," he said. "That's the vision that we've been talking about for a really long time, and the market conditions and our own performance on both sides really allowed us to do it right now."
Often with an acquisition of this size, startups get purchased with cash, stock or a mix of the two. Taylor declined to comment on the composition of the payment and other deal details. Taylor said all of Convey's employees will be retained in the deal, and he said Convey will continue to hire additional team members. He also said Project44 will likely develop an additional Austin presence.
"I expect there to be tremendous growth here in Austin," he said.
Convey's exit is providing a financial return for just about everyone who has been involved in the journey of the company, which was founded in 2013. Taylor noted that all employees got a financial boost from the deal. He declined to discuss the range of returns that employees and investors may have gotten, but noted that "everyone is smiles."
"The feedback has been universally positive on people are feeling really good about the reward for the hard work that we put in for seven years to build this company," he said. "And everybody felt really good about that."
Convey has about 100 employees, including 65 in Austin. It had raised just shy of $26 million in venture capital from investors including Silverton Partners, Techstars Ventures, NextGen Venture Partners, RPM Ventures, Corsa Ventures, Hurt Family Investments, Alder Growth Partners and Capital Factory.
